Private equity has been classed as less risky than hedge funds in the latest draft of Europe’s rules on how much capital insurers must hold in reserve against certain investments.

The Solvency II delegated act, passed by the EU Commission earlier this month, said insurers should hold on to the equivalent of 39% of the capital they have committed to a private equity fund to help guard against market shocks, putting the asset classes alongside infrastructure funds and the equities listed in the countries of the Organisation for Economic Co-operation and Development. This compares with 49% for hedge funds, equities listed in non-OECD markets and other alternatives funds.